According to data from SunSirs, as of December 31, the average price of LNG in China was 5,510 RMB/ton, which is 6,176 RMB/ton compared to the average price on January 1. In 2023, the price of LNG in China decreased by 10.78%. The highest value for the year was 6,646 RMB/ton on November 30th, and the lowest value for the year was 3,520 RMB/ton on June 5th.
In the first half of 2023, domestic LNG prices fluctuated and fell.
In the first quarter, after a significant drop in domestic LNG prices in January, they quickly rose. Downstream demand weakened before the Spring Festival, and the market's inventory mentality increased. After the Spring Festival, transportation resumed smoothly, and downstream replenishment demand increased, leading to a rapid increase in LNG prices. In early February, the market fully resumed work after the holiday, and on-site supply increased. Traffic was hindered due to rainy and snowy weather in China, and liquid factories reduced prices for sales. In mid February, with the increase in raw gas prices and cost assistance, domestic liquid prices rose. In March, the domestic temperature gradually rose, and the demand for LNG in the market decreased. Some downstream enterprises have stopped production and reduced industrial demand, resulting in a continuous decline in LNG prices.
In the second quarter, in April, domestic LNG prices fluctuated. In mid April, downstream replenishment demand increased, and LNG prices stopped falling and rose. The increase in raw material gas prices is favorable for cost support. In May, domestic LNG prices fluctuated and fell. Market supply exceeds demand, weak on exchange transactions, strong willingness of liquid plants to discharge inventory, coupled with declining costs, the price of LNG continues to weaken. In June, some liquid plants underwent maintenance, resulting in a decrease in market supply. Combined with the increase in raw gas prices, cost support is favorable. With the arrival of high temperature weather in many parts of China, demand has increased, and LNG has started a continuous upward trend.
In the second half of 2023, domestic LNG prices fluctuated and increased.
In the third quarter, in July, domestic LNG prices rose first and then fell. Factory maintenance has increased, market supply is tight, coupled with better cost support, downstream restocking has increased, and domestic liquid prices have collectively risen. With the gradual resumption of factory maintenance, market supply has increased, and liquid prices have decreased. In mid to early August, the price of raw gas was pushed forward, and domestic liquid prices rose. In late August, some maintenance liquid factories resumed work, leading to an increase in market supply and a decrease in liquid prices. In early September, cost support was positive, and domestic LNG prices significantly increased. In mid September, the market was dominated by oversupply, and liquid prices began to decline. In late September, with no pressure on the liquid level and local pipeline maintenance, the price of LNG rose again. As the National Day holiday approaches, liquid prices will fall again at the end of the month.
In the fourth quarter, in October, the price of raw gas rose, and cost support was favorable. Liquid plants raised prices one after another, and the joint efforts of sea and land pushed up prices. With the arrival of the heating period in November, the demand for downstream replenishment has increased. Under the policy of gas restriction and supply guarantee, some liquid plants have reduced production and operation, resulting in no pressure on the market liquid level. In late November, the price of raw gas significantly increased, driving up the collective surge in liquid prices, with some liquid factories experiencing prices exceeding 7000 RMB. In the first half of December, raw material gas prices significantly decreased, weakening cost support. Rainy and snowy weather is approaching in many parts of China, and transportation is not smooth. There is a strong attitude towards liquid factory storage. In the second half of December, the price of raw gas increased, driving up liquid prices. After the snowfall, the traffic flow is smooth, the demand for downstream replenishment has significantly increased, and liquid prices have continued to rise.
According to the K-bar chart of 2023, it can be seen that the largest increase in domestic LNG for the year was in November, with a growth rate of 29.3%. The largest decline of the year was in March, with a decline of 28.03%.
LNG Market Forecast for 2024
International market
Under the influence of geopolitical tensions, international LNG prices have fluctuated and fallen in 2023, maintaining an overall low level. In 2023, the United States surpassed Qatar and Australia to become the world's largest exporter of LNG. In 2023, the overall natural gas prices in the United States are also in a downward trend. As the world's largest exporter of LNG, the natural gas prices in the United States also affect the global natural gas market.
Supply situation
In recent years, China's LNG industry has developed rapidly, with production increasing year by year. From the perspective of regional distribution, North China and Northwest China are the main producers of LNG in China. In 2022, the cumulative production of LNG in China was 17.427 million tons, with a year-on-year increase of 10.6%. The cumulative production of LNG in China from January to November 2023 was 18.3836 million tons, with a year-on-year increase of 11.13%. LNG belongs to the field of clean energy and is a key industry supported by China in recent years. It is still in a period of rapid development in the coming years. It is expected that China's production will continue to increase in 2024.
In 2023, the import volume of LNG in China was 71.317 million tons, a year-on-year increase of 12.6%. In 2023, China's LNG exports reached 1.153 million tons, a year-on-year increase of 100.2%. In 2023, both the import and export volume of LNG in China increased, with the import volume far exceeding the export volume. Due to China's own energy scarcity and differences in foreign trade, it is expected that the import volume of LNG in China will continue to increase in 2024.
Demand situation
LNG, as a clean, efficient, and low-carbon energy source, is increasingly being accepted and adopted by more and more countries and regions. With the improvement of residents' living standards, they are more eager to use clean energy, and the demand for LNG in China is also increasing. In recent years, the demand for LNG in China has significantly increased, and the industrial sector has become the main driving force for the growth of LNG demand.
In summary, LNG (LNG) in China is mainly affected by various factors such as weather conditions, international market conditions, raw material gas prices, market supply and demand, and import and export conditions. The price fluctuates greatly and there are many uncertain factors. In 2024, the demand for LNG in China's market will continue to increase, and the production and export volume will also continue to increase. It is expected that the domestic LNG market will experience a wide range of fluctuations in 2024, with a sharp increase in demand during the domestic heating season in November, which will be the highest price point for the whole year.
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